The global functional ingredients market is expected to be valued at USD 96.1 billion by 2026, growing at a CAGR of 5.9%, according to a new report by Grand View Research, Inc. The globally increasing consumption of healthy convenience foods has been a major factor driving the market for the last few years. The growing health consciousness along with the rapidly expanding pharmaceutical industry in Asia Pacific have also led to the increased utilization of functional ingredients.

Growing health concerns and increasing health issues such as diabetes, obesity, and digestive disorders are the major factors expected to propel the regional market over the forecast period. The introduction of innovative products and investments made by major producers have resulted in a considerable demand for functional ingredients in food & beverages industry. Moreover, shifting consumer preferences for premium personal care products based on natural and herbal ingredients are estimated to drive the market over the forecast period, especially in personal care applications.

Probiotics were the largest product category in 2016 and are expected to maintain a substantial growth rate over the forecast period. Rice protein is projected to witness the fastest CAGR of 8.4% during the forecast period.

Rice protein concentrates are being increasingly utilized in nutritional beverages, bars, baked food products, confectioneries, and desserts, which is likely to have a positive impact on their growth over the forecast period. Companies including Prinova utilize rice protein concentrates in their products, which is anticipated to increase consumer awareness, thereby fueling the demand for the product over the forecast period.Consumers have been increasingly focusing on healthy diets, which is predicted to boost the demand for rice protein in various sports & energy nutrition products in the next few years.

Further key findings from the report suggest:

The global demand for functional ingredients amounted to 12,671.7 kilo tons in 2016 and is estimated to report a CAGR of 4.4% from 2017 to 2026. North America dominated the global market in 2016, followed by Europe. Emerging economies such as China, India, and Brazil are predicted to lead their respective regional markets over the forecast period.

Food & beverages emerged as the largest segment of the market by application in 2016. Functional ingredients act as stabilizers, binders, flavor enhancers, and antioxidants in the production of food. Rising health concerns coupled with the growing incidence of digestive disorders caused due to unhealthy lifestyles are projected to be the key drivers of the market over the forecast period.

The market in Asia Pacific is projected to witness substantial growth over the next decade owing to various developments across major economies, especially in the food & beverages sector

Probiotics dominate the global market in terms of revenue throughout the analysis period. The per capita consumption of probiotics in dietary and food supplements has been the highest in Japan over the past few years due to the country's effective regulatory framework and long traditional probiotics background.

Key market players include Archer Daniels Midland Company, Ingredion Incorporated, Golden Grain Group Limited, FMC Corporation, Omega Protein Corporation, NutriBiotic, Cargill Incorporated, Tate & Lyle plc, and Roquette Freres. Companies such as Royal DSM are investing in the development of newer technologies coupled with the acquisition of raw material manufacturers. Agreements and collaborations are also among the major strategies adopted by key players.